Job hunters find past comes back to haunt the present
LOS ANGELES IN a nondescript two-story building in suburban Simi Valley, an obscure company known as EMA-SPA keeps private files that are the kiss of death for thousands of job hunters.
EMA-SPA says its ``incident files'' catalog people fired because their bosses concluded they were stealing, using drugs or harassing co-workers while on the job, among other things. The dossiers also name department store customers nabbed by security guards and accused of shoplifting.
The trouble is, many -- and perhaps most -- of the estimated 200,000 people with blemished records on file have never been arrested for these purported wrongdoings. Commonly, they don't even know what EMA-SPA is or that their names are on file.
That hasn't stopped employers from Circuit City Stores to Tiffany & Co. to Reno Air from consulting the files before deciding whether to hire an applicant or keep a new probationary employee.
Accused at 16 of trying to steal a T-shirt? Your prospects of getting a job at one of EMA-SPA's 150 clients may be doomed, or at least clouded, for years.
Welcome to the little-known but flourishing business of pre-employment background checks. Prompted by concerns about everything from workplace violence to bogus worker's compensation claims, employers are digging ever more deeply into applicants' personal histories.
Without background checking, asked Leif J. Lauritzen, EMA-SPA's president and chief executive, ``how do businesses know who they are hiring in an anonymous and mobile world?''
Yet the job of answering that question often falls to a spottily regulated realm of corporate security firms, detective agencies, credit bureaus and other companies, many newly formed.
Typically, these companies check computer data bases or comb through court, credit and driving records -- and sometimes medical histories, job-injury claims and police reports. EMA-SPA goes a step further, using its own private files to scrutinize candidates.
The rise of technology
For years, many employers have verified resumes and given applicants drug tests and, to a lesser extent, psychological exams. Genetic tests and even handwriting analysis also have been used.
The rise of background checking, however, signals the harnessing of technology and other investigative tools to exhume details and incidents that applicants once could -- rightly or wrongly -- write off as ancient history.
As such, privacy experts say, it poses a growing threat to fairness, particularly when the checkers rely on consumer credit reports and other frequently inaccurate data bases. A 1990 survey of 161 credit reports by Consumers Union, for instance, found 19 percent contained ``major inaccuracies.''
Applicants can be hurt Even worse, privacy advocates say, the trend threatens to relegate job hunters who may have had scrapes with the law as teen-agers to an underclass with little chance of finding decent employment.
``It's so easy when you see something in a background check that doesn't look so wonderful to throw the resume in the wastebasket and look at someone else,'' said Lewis Maltby, workplace rights director for the American Civil Liberties Union.
But the demands of the competitive business world and the threat of costly litigation involving rogue employees give employers strong financial incentives to step up pre-employment screening. In a survey last April of 500 large companies, the American Management Association found that 42 percent investigate whether candidates have criminal records. Two-thirds said they perform some type of background check, including such traditional practices as calling former employers and schools listed on a resume.
Parents use firm, too
Nor are background checks performed only for big business. Parents interviewing prospective nannies sometimes use investigative firms to ensure they don't end up making a potentially tragic mistake, such as hiring a convicted child molester.
Depending on complexity, the checks typically cost from $20 to $200. In spite of concerns that some checkers overstate how foolproof their services are, that's a price many employers are happy to pay.
The Postal Service, shaken by an array of shooting sprees involving employees, hired a background-checking firm in September 1993 to screen candidates at a cost of less than $30 per person.
Generally, employers lack solid evidence that background checks actually reduce violence or other workplace problems. But spokesman Roy Betts said postal officials sense they are receiving fewer applications from people with criminal convictions, bad driving records or dishonorable military discharges.
``The word is out on the street that the Postal Service is scrutinizing applicants a lot more closely,'' he said.
While there is no one law covering workplace privacy rights in general or pre-employment screening in particular, a patchwork of state and federal laws apply. These include civil rights acts, fair credit statutes and laws intended to prevent discrimination against the disabled and people who have filed worker's compensation claims. As a practical matter, though, the laws often are ignored or are artfully manipulated, opening up opportunities for abuse.
Take, for example, the federal Fair Credit Reporting Act, probably the most important law pertaining to pre-employment background screening. The act requires that applicants be told when they are rejected for jobs because of information uncovered in ``investigative consumer reports'' or more conventional credit checks.
But experts say violations by employers often go undetected. The result: Many people aren't even aware that their prospects were doomed by a background check.
At times, workers find out the hard way that their backgrounds have been checked.
Consider James Russell Wiggins Jr., a 40-year-old father of four now working as an emergency medical technician. In December 1989, he accepted a sales job with District Cablevision, a cable TV company in Washington.
The next month, a unit of the giant consumer reporting firm Equifax Inc. conducted a background check on Wiggins for District Cablevision and concluded that he had recently been convicted on a cocaine charge.
But the background checker had researched a different James R. Wiggins. District Cablevision declines to comment, but Equifax acknowledges the mistake, saying its reviewers swiftly corrected the error within days after the ``right'' Wiggins protested.
By then, the damage was done. Some of the facts are in dispute, but Wiggins claims in a lawsuit against the two companies that he had already been fired. The case is awaiting trial in federal court.
Critics say background checkers sometimes dig up police records that are not supposed to be publicly disclosed, and the potential misuse of arrest and conviction data especially can hurt minorities because they more often are singled out by police.
EMA-SPA -- whose complete name is Employers Mutual Association United/Stores Protective Association -- was founded in 1929 by members of the families that launched the May and Bullock's department stores. The rationale for their joint effort: ``They perceived that no one stole from just one of them,'' said EMA-SPA's Lauritzen.
Today, EMA-SPA is a not-for-profit company with 30 full-time employees in Simi Valley, about 35 miles northwest of downtown Los Angeles. Its roughly 150 clients pay yearly fees of $120 and, ordinarily, anywhere from $1.60 to $75 per background check, depending on the range and complexity of the job.
The firm's only officer is the hands-on, 53-year-old Lauritzen. He joined EMA-SPA as a computer analyst in 1971 and worked his way up. Lauritzen describes the service his organization provides employers in lofty terms. On one level, he says, background checking of the sort EMA-SPA provides is an antidote to a permissive society. The message of his industry, Lauritzen said, is that ``there are repercussions associated with your actions.''
Published 3/12/95 in the San Jose Mercury News.
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